[1999] OLRB REP. JANUARY/FEBRUARY 73
2977-98-PS Corporation of the Grey Sisters of the Immaculate Conception of the Penetanguishene General Hospital and Huronia District Hospital Corporation 0/a North Simcoe Hospital Alliance, Applicant v. Canadian Union of Public Employees and its Local 3157, Service Employees International Union, Local 204, and Ontario Public Service Employees Union and its Local 328, Responding Parties
Public Sector Labour Relations Transition Act - Penetanguishene General Hospital ("PGH") and Huronia District Hospital ("HDH") creating North Simcoe Hospital Alliance (the "Alliance") in 1993 - Board satisfied that PGH and HDH operating as a partnership under the name of Alliance and that Alliance an employer within the meaning of section 9(4) of the Public Sector Labour Relations Transition Act ("PSLRTA") entitled to bring application under the PSLRTA - Board finding that merger of medical staff, consolidation of medical records, consolidation of fluoroscopy units and implementation of single administration procedure manual are all events that had been decided, planned and scheduled prior to "transitional period" but which were implemented during transitional period - Board finding that these events demonstrate a merger of hospital operations within the meaning of section 9(1)(a) - Board having regard to factors set out in section 9(6) and declaring that the PSLRTA applies to the Alliance and to PGH and HDH and that PGH and HDH are the predecessor employers and that PGH and HDH operating as a partnership under the name of Alliance is the successor employer for purposes of the PSLRTA
BEFORE: Harry Freedman, Vice-Chair.
APPEARANCES: Kees W Kort and M. Qucaley for the applicant; Nick E. Milanovic, Dana Ivanochko,Colleen Irvine and Mary Stewart for Canadian Union of Public Employees and its Local 3157; Sean Fitzpatrick, Debra Elliott, Linda Micks and Marilyn Desroches for Service Employees International Union, Local 204; David Wright, Ed Ogibowski, Tracy Mussett and Sherry Weese for Ontario Public Service Employees Union and its Local 328.
DECISION OF THE BOARD; February 24, 1999
This is an application made under section 22 of the Public Sector Labour Relations Transition Act, 1997, S.O. 1997, c. 21 (the "Act") for relief arising as a result of a declaration the applicant seeks to have the Board make under section 9 of the Act.
At the opening of the hearing in this matter on February 16, 1999, counsel for the applicant moved to amend the name of the applicant and the description of the bargaining unit contained in its material. After hearing the submissions of the parties, the Board delivered the following decision at the bearing in relation to the applicant's request to amend its name in this proceeding. The applicant gave the other parties notice of its position with respect to the bargaining unit description it was seeking. The description of the bargaining unit or units would be determined, if necessary, at a later stage of the proceeding.
Motion to Amend the Name of the Applicant
This application under section 22 of the Act was made by the North Simcoe Hospital Alliance. Both the Canadian Union of Public Employees and its Local 3157 ("CUPE") and the Ontario Public Service Employees Union and its Local 327 ("OPSEU") have taken the position that the North Simcoe Hospital Alliance ("the Alliance") is not an employer and therefore cannot make this application under section 22 of the Act. The Service Employees International Union, Local 204 ("Local 204") submits the Alliance is the employer, or if it is not the employer, the application should be amended as requested by the Alliance to correct what is a mere technical irregularity.
Section 22(1) of the Act provides, in part:
the Board, upon the application of a successor employer or any bargaining agent that has bargaining rights, may by order determine the number and description of bargaining units that are appropriate for the successor employer's operations after the occurrence described in sections 3 to 10."
It is clear that the application must be made by either a "successor employer" or "any bargaining agent that has bargaining rights". The order sought by the Alliance under section 9 is a declaration that the Act applies as a result of an event described in section 9(1 )(a) or 9(1 )(b) of the Act. The Alliance argues it is a successor employer entitled to make this application under section 22 of the Act.
Counsel for the Alliance moved to amend the title of this proceeding to make it clear that the applicant is actually the Corporation of the Grey Sisters of the Immaculate Conception of the Penetanguishene General Hospital ("PGH") and the Huronia District Hospital Corporation ("HDH") operating as the North Simcoe Hospital Alliance. Counsel submitted that, as a practical matter, the Alliance operates both the Huronia District Hospital and the Penetanguishene General Hospital and is in effect a partnership or joint venture of HDH and PGH.
The creation of the North Simcoe Hospital Alliance occurred in September, 1993 as a result of a letter of agreement between HDH and PGH. The responsibilities of the Alliance are spelled out in that letter of agreement. Those responsibilities are:
"Responsibilities of the North Simcoe Hospital Alliance
Subject to the health care ethical principles of both the Grey Sisters and Huronia District Hospital, the Alliance will have the authority to plan and direct the location or relocation of
- existing and new hospital patient care services
- selected administrative services
- selected support services
The Alliance will also be responsible for:
- reallocating operating budgets from one hospital to the other to reflect the costs of transferred programs and services
- reviewing and approving all new and expanded programs and clinical services in each hospital
- approving the acquisition of all new equipment, building and land
- reviewing and making recommendations to each hospital oard on annual capital and operating submissions to the Ministry of Health."
- It is of interest to note that the parties also agreed that the existing hospital corporations and the existing boards of those corporations kept certain responsibilities that were spelled out in that letter of agreement. Finally, the parties to that letter of agreement (HDH and PGH) provided that:
"No part of this agreement is legally actionable."
Counsel for the Alliance advised the Board that the two principals, PGH and HDH, are jointly and severally liable for the duties and obligations owed by either of them to their employees and to the unions that represent those employees.
Counsel for OPSEU, supported by CUPE, submits that the Alliance is not an employer. At paragraphs 7 and 8 of OPSEU'S brief, counsel states:
"7. At paragraph 15 of its submissions, the Applicant has set out the matters which HDH and PGH assigned to the Alliance when it was created. What the Applicant does not set out are the matters which are reserved to the hospitals pursuant to the agreement. Those are found on the second page of Tab 6 of the Applicant's submissions and provide that:
Each hospital corporation will continue to maintain complete responsibility and control over:
- the determination of its corporate philosophy
- the appointment and/or election of its board members
- its merger or dissolution
- the sale and encumbrance of its assets
- the amendment of its bylaws and charter
Each Hospital board will continue to be responsible for:
- operating its institution in accordance with the Public Hospitals Act, its regulations and other applicable legislation
- managing the programs and services transferred to it by the Alliance.
- This agreement is still in place and has not been amended or altered. Thus, it can be seen that PGH and HDH remain separate and operational legal entities. The two hospitals have separate legal status and are separately funded by the Ministry of Health. In fact, the two hospitals have separate Boards, separate CEO's and maintain separate bank accounts. Monies are received and disbursed in the names of the two hospitals and not in the name of the Alliance. Pay cheques are issued by either PGH or HDH. Employees are hired by either HDH or PGH and become employees of one or the other hospitals. In fact, some persons are employed by and draw separate cheques from both of HDH and PGH."
It is clear that each of HDH and PGH have been employers and may still be employers. They continue to exist as separate and distinct corporate entities. But it is also clear from the representations I received and from the material filed by the parties that the Alliance is a partnership, the terms of which are governed in part by the letter of agreement of September, 1993 and as a corporate matter, by the Partnerships Act, R.S.O. 1990, c.P-5. I am satisfied, based on the representations of the Alliance and the material filed in this matter, that the Alliance is a partnership of HDH and PGH, who are each subject, as any other principals in a partnership are, to the liabilities, duties and responsibilities to third parties, for example unions and employees, imposed by the Partnerships Act or at common law.
Therefore, I am persuaded to amend the title of the proceedings herein and declare that the applicant is the PGH and HDH operating as a partnership under the name "North Simcoe Hospital Alliance". I am also satisfied that the Alliance as a partnership is an employer within the meaning of section 9(4) of the Act as it is operating both of the hospitals owned by PGH and HDH respectively.
I also wish to add that counsel for the Alliance has declared on behalf of his client, on the instructions of both PGH and HDH, that each of PGH and HDH are jointly and severally liable for all of the obligations and debts that are or may be incurred by the Alliance and further that any collective agreements made by the Alliance or orders issued against the Alliance are binding upon and enforceable against PGH and HDH jointly and severally.
As a result, this matter will continue before me to deal with the balance of the issues raised by the parties in this proceeding.
Whether the Public Service Labour Relations Transition Act Applies
Following release of the above decision, the hearing continued for the balance of the day for the purpose of receiving the parties' representations with respect to the Alliance's request under section 9 of the Act for an order declaring that the Act applies.
The Alliance seeks an order from the Board under section 22(1) of the Act consolidating the bargaining units currently represented by the responding parties at PGH and HDH. In order to obtain the relief it seeks, the Alliance must first establish that the Act applies to it. In order for the Alliance to do so, it must first obtain an order declaring that the Act applies as a result of the happening of an event described in section 9(1) of the Act. Section 9(1) provides:
"The Board may by order declare that this Act applies as a result of,
(a) the merger of all or part of the operations or administration of two or more employers who operate hospitals during the transitional period; or
(b) a substantial restructuring of two or more employers who operate hospitals during the transitional period."
The Alliance makes the request for the order under section 9(1) pursuant to section 9(4) of the Act which provides:
"An employer operating a hospital that may be the subject of an order or a bargaining agent that represents employees at such a hospital may request the Board to make the order."
The Board, having found that the Alliance was an employer operating a hospital that may be subject to an order under the Act, is satisfied that the Alliance has standing to make this application for a declaration under section 9(1) and, if successful in obtaining that order, has standing to make the application for relief under section 22 of the Act.
Counsel for the parties filed extensive briefs setting out the factual context and their legal submissions in support of their respective positions in relation to this application. Those briefs and counsel's submissions at the hearing of this matter enabled the Board and the parties to focus on the material issues in dispute. Counsel were able to proceed with their arguments on the basis of the facts set out in the briefs, which were uncontested. The Board appreciates the cooperation of counsel and thanks counsel for their skill and efficiency in the presentation of their arguments.
The parties agreed before me that OPSEU and CUPE would proceed first with their argument that the Alliance was not entitled to seek relief under the Act as nothing happened during the relevant time that comes within the provisions of section 9(1) of the Act. Despite the order of their argument, the burden of persuasion remained with the Alliance. I note that Local 204 agreed with the position of the Alliance with respect to the conditions precedent for a declaration being made under section 9(1) of the Act.
Counsel for OPSEU submitted that section 9 of the Act requires that the events described in section 9(1) must have occurred as of the filing of the application and, more importantly, must have taken place during the "transitional period." The transitional period is defined by section 2 of the Act as being the period between the date section 2 came into force (which the parties agreed was October 28, 1997) and December 31, 2001 (or such later date as may be prescribed by regulation under the Act). Counsel also submitted that section 22 of the Act makes clear that the Board should not have regard to circumstances that existed prior to the event that allegedly gives rise to the declaration being sought by the applicant under section 9.
In order to determine whether to make an order declaring that the Act applies, counsel submits that the Board must first be satisfied that the events described in either section 9(l)(a) or section 9(l)(b) have taken place. In assessing whether there has been a "...merger of all or part of the operations or administration of two.. hospitals" [section 9(1 )(a)] or "a substantial restructuring of two...employers who operate hospitals" [section 9(l)(b)], regard may be had to the factors listed in section 9(6) of the Act provided the events described as factors in that section occurred during the transitional period. Section 9(6) of the Act states:
"When making an order under this section, the Board shall consider the following factors and such other matters as it considers relevant:
The scope of agreements under which services are shared by the participating hospitals.
The extent to which the participating hospitals have rationalized the provision of services.
The extent to which programs have been transferred among participating hospitals.
The extent of labour relations problems that have resulted or could result from the agreements, rationalizations or transfers."
In particular, counsel for OPSEU referred to item 4 of section 9(6), which, he submits, clearly demonstrated that the legislature put its mind to temporal parameters by directing the Board not only to labour relations problems "that have resulted" but also to such problems that "could result" from the events described in section 9(1).
Counsel for OPSEU readily conceded if the creation of the Alliance and the events that have taken place since the Alliance existed had occurred during the transitional period, OPSEU would immediately acknowledge that the conditions precedent for the Board to make an order declaring that the Act applies are present. But that is not the factual situation in this proceeding, counsel argues. Rather, counsel submits that what has taken place in the transitional period are merely the finishing touches or the finalization of the restructuring or the mergers that had happened well before the transitional period began.
The Alliance submits that there has been an ongoing and substantial restructuring since the creation of the Alliance as well as a merger of significant portions of the operations and administration of PGH and HDH both before and during the transitional period. If the Board were only to look at the transitional period, counsel for the Alliance relies on the finalization of the consolidation of medical staffs that occurred in June 1998, the transfer and consolidation of medical records from both hospitals to HDH in May and June, 1998, the consolidation of the fluoroscopy units from both PGH and HDH to the HDH site in June 1998, the creation and implementation of a single policy administration manual for use by the Alliance at both hospitals in the fall of 1998, and the assignment of new long term care beds for an interim period to HDH in January, 1999.
Counsel for OPSEU submits that the events that happened during the transitional period are just the culmination and effect of the merger of administration and operations that had occurred before the transitional period. Counsel argued all of the items relied on by the Alliance were ongoing and planned well before the transitional period began and therefore cannot be used to justify the massive interference in the bargaining rights and structure of the bargaining units that would result should the Board find that the Act applies. He argued that had the legislature intended to capture all of the restructuring that was going on in the health care sector, the legislation would have clearly stated that it applied when the events described in section 9(1) occurred without making reference to those events taking place during the transitional period. Counsel submitted that the legislature has not been shy about making retroactive changes to labour legislation. Simply put, counsel for OPSEU argued the legislation does not apply to restructuring or mergers that occurred prior to the commencement of the transitional period and that what had happened at PGH and HDH was the culmination or finalization of the merger or restructuring that had taken place before the transitional period.
Counsel for CUPE adopted the submissions of OPSEU.
Before beginning the analysis of the parties' submissions, it is clear to me that the assignment of interim long term care beds to the Alliance is not a relevant factor in determining whether an order under section 9 declaring the Act applies should be made by the Board. Counsel for the Alliance acknowledged during his argument that neither PGH nor HDH had, prior to receiving that assignment, responsibility for long term care beds. Counsel for the Alliance argued that the long term care beds were "similar" to the chronic care beds operated by PGH, but due to physical space availability, the Alliance placed those long term care beds at HDH. This, counsel argued, was another example of a merger of part of the operations of the hospitals.
The parties advised me that "long term care beds" and "chronic care beds" are treated differently by the Ministry of Health in terms of budget allocation and are staffed differently. While they may be similar to the extent that patients are in them for "long term~~ or "chronic" care~ as opposed to patients receiving "short term" or "acute" care provided by hospitals, long term care beds are different and were not at either hospital prior to their introduction, albeit on an interim basis, in 1999. (PGH is a chronic care facility and has operated chronic care beds at all times material to this proceeding.) Long term care beds were described as being the kind of beds, in terms of budget and staffing, normally found in a nursing home, not a hospital. Since neither PGH nor HDH had long term care beds prior to the end of 1998, I am satisfied that they could not be used as a basis for finding a "merger of operations or administration" either in whole or in part within the meaning of section 9(1 )(a) of the Act.
In my opinion, in order to have a merger of operations or administration, there must have been two or more operations or administrative functions in place prior to the merger. The long term care beds were assigned to the Alliance when there had never before been long term care beds at either PGH or HDH. That assignment and subsequent allocation of those beds to HDH instead of PGH could not, in my view, constitute a merger of part of the operations or administration within the meaning of section 9(1)(a) of the Act. Thus, since that event did not come within the meaning of section 9(l)(a), I did not even consider the factors described in section 9(6) of the Act in relation to the introduction of long term care beds to the Alliance.
Counsel for the Alliance submits that section 22 of the Act does not, as counsel for OPSEU suggests, contain a temporal limitation or preclude the Board from having regard to events that may have occurred prior to the transitional period. Counsel argued that the words "after the occurrence described in sections 3 to 10" in section 22 refer to the "changeover date" determined by the Board under section 9(3) of the Act. Section 9(3) of the Act provides:
"For the purposes of this Act, the changeover date is the date on which the order is made, or such other date during the transitional period as the order may specify. The order may specify a date earlier than the date on which it is made. ~'
The term "changeover date" is found in each of sections 3 through 10 of the Act. In the case of section 9, counsel submits that the Board can fix the changeover date to be any time during the transitional period and is expressly empowered to make the changeover date a date earlier than the date the Board issues the order declaring the Act applies. Thus, counsel argues the Board is not limited to considering the factors under section 9(6) only if they occurred during the transitional period. While it is acknowledged that the merger (section 9(1)(a)) or restructuring (section 9(1)(b)) must be found to have occurred during the transitional period, the factors described in section 9(6) are not so limited.
While it is beyond dispute that the restructuring or merger started before the transitional period, that does not end the inquiry counsel for the Alliance argues. Plans can and do change. Until the actual event has occurred, there cannot have been a merger or restructuring. In counsel's submission, even if the events could be characterized as the culmination of the plans and administrative mergers that had started before the transitional period, they are nevertheless events that give rise to the Board having the jurisdiction to make the order declaring the Act applies.
Counsel for Local 204 supported the interpretation of the Act presented by counsel for the Alliance. Local 204 submitted that the focus of the Board's inquiry should be on section 9(6) of the Act to understand what the legislature had in mind when establishing the kinds of events that must occur in order for section 9(1) to apply. Counsel argued some event that would arguably come within section 9(1) was all that was necessary for the Board to then examine the factors enumerated in section 9(6) of the Act. Whether that event was sufficient to trigger an order declaring the Act applied would then be determined by taking into account the considerations listed in section 9(6). Counsel for Local 204 also submitted that the Board, under section 9(6), must examine the circumstances in their entirety, including what had occurred before the transitional period, in order to assess whether to make the order sought. It would be artificial to read section 9(6) as narrowly as counsel for OPSEU and CUPE urge the Board to do. The thrust of the Act, counsel submits, is to deal with the impact the ongoing changes have had on employees in the service areas of the hospital. To limit the examination of factors to just those things that have occurred during the transitional period would not be in keeping with the purposes of the Act. Once the Board finds that an event, however minor, described in section 9(1) happened during the transitional period, then the Board's examination is a broad one looking at all of the relevant circumstances pursuant to section 9(6).
The parties advised the Board that this is the first case under the Act where an issue had been raised with respect to the applicability of the Act. The Board in St. Joseph's Health Centre, Board File Nos. 3146-97-R; 3149-97-R; 3150-97-R; and 3186-97-PS, decision dated May 12, 1998, [1998] O.L.R.D. No. 2872 commented upon the structure of the Act. Although the Board was dealing with an amalgamation under section 8 of the Act, it made the following observations about section 9 at paragraphs 59 through 61 of that decision. The Board stated:
"Section 8 contemplates the same kind of mergers that have happened recently with school boards or municipalities (for example, the new City of Toronto). Section 8 envisages a FORMAL FUSION OF THE PREDECESSOR CORPORATIONS. The date of the amalgamation establishes the "changeover date".
Section 9 is a little different. Section 9 contemplates the DISCRETIONARY application of the Act in what might be described as an "operational merger" - a situation where there has been a "rationalization of service delivery" between corporate entities that are not formally amalgamated. Section 9 extends the statute's remedial reach to circumstances which do not fit a standard merger scenario, but nevertheless give rise to the kinds of problems to which Bill 136 is addressed.
Section 9(6) sets out some of the circumstances which the Board must consider in deciding whether to make an order under section 9(1). These items illustrate the kind of scenario which would not be caught by section 8, but to which Bill 136 might sensibly apply. However, in deciding whether section 9 "should be made to apply" (i.e. how the Board should exercise its discretion under section 9(1), it seems to me that the Board should also take into account the general scheme and purposes of Bill 136, read as a whole. Those purposes are recorded in section 1 of Bill 136, that has been reproduced above."
The Board's discretion to decide to apply the Act, in my view, exists only where the events described in section 9(1) have taken place during the transitional period. In other words, the Board has the discretion to refuse to grant an order declaring that the Act applies if the conditions in section 9(1) have been established. There is not, in my view, a corollary discretion to grant an order declaring that the Act applies if the conditions in section 9(1) have not been established. The factors set out in section 9(6) would be used by the Board in determining whether to exercise the discretion conferred upon it by section 9(1) only after the Board were satisfied that an event described in section 9(1) had occurred during the transitional period.
In my opinion, the four events that the parties acknowledge happened during the transitional period, that is:
i) the merger of the medical staff with the appointment of a single chief of staff for the Alliance and the granting of medical privileges by the Alliance;
ii) the consolidation of the medical records from both hospitals at HDH;
iii) the consolidation of the fluoroscopy units from both hospitals at HDH;
iv) implementation of a single administration procedure manual for the Alliance replacing the individual procedures manual at both hospitals;
when considered in their totality demonstrate clearly that there has been a "merger of .. .part of the operations or administration of the two. ..employers who operate hospitals during the transitional period" within the meaning of section 9(1)(a) of the Act. Even though these four events had been decided, planned and scheduled prior to the transitional period, they were implemented during the transitional period. Thus, I am satisfied that I have the discretion to determine whether to grant the order declaring the Act applies, and before doing so, I must have regard to the factors set out in section 9(6).
I am satisfied it is the actual implementation of the merger decisions, not the mere decisions themselves, that are the events or occurrences captured by section 9(1)(a) of the Act. Where "concrete plans or decisions" for a merger or restructuring have been made and are in place and the parties affected agree that the Act applies, the Board may, on the parties' agreement as to the fact that there has been a merger or a restructuring during the transitional period, issue an order declaring that the Act applies. Where, as here, there is a dispute about whether the Act applies, having plans or deciding to merge or restructure, by themselves are not enough. The merger or restructuring must actually occur so that when there is a dispute over the application of the Act, there will be a factual context in which that dispute can be resolved.
If the only event which occurred during the transitional period was the merger of the medical staff, it is unlikely that the Board would grant the declaration sought as counsel for the Alliance conceded that the merger of the medical staff had only an indirect impact on employees in the affected bargaining units. In my view, the factors enumerated in section 9(6) are particularly relevant when the "scope of agreements" [paragraph 1], the rationalization of "the provision of services" [paragraph 2], the transfer of programs [paragraph 3] and the "extent of labour relations problems" [paragraph 4] have a direct effect on employees in the bargaining units within the hospitals. Simply consolidating medical managerial functions, for example, from each hospital by creating a single chief of medical staff without changing the assignment of bargaining unit work among bargaining unit employees would not, in my opinion, create the kind of mischief the Act was intended to cure.
In the circumstances before the Board in this case, the events relied on by the Alliance, in my opinion, have had a direct impact on the bargaining unit employees and on their bargaining agents. The consolidation of medical records into one of the two hospitals together with the consolidation of the fluoroscopy units results in employees who may have worked in one bargaining unit at one of the hospitals finding themselves working or trying to enter another bargaining unit at a different hospital. Similarly, the single administration procedures manual, although a management tool, does have a direct impact on how employees are expected to work (subject, of course, to the applicable collective agreements) and the policies and procedures established by management that apply to the work place. In my view, these kinds of changes in the workplace when considered together with the merger of the medical staff are precisely the types of circumstances the legislature had in mind when enumerating the factors the Board was required to consider when making an order under section 9.
Given my conclusion, I have not had to consider whether the mergers and restructuring that occurred prior to the transitional period are relevant under section 9(6) to the exercise of the Board's discretion to make an order under section 9(1) of the Act.
Declaration
I am satisfied as a result of the merger of part of the operations and administration of PGH and HDH that occurred during 1998, which was within the transitional period, the Board should make the order requested under section 9(1) of the Act. Therefore the Board hereby declares that the Act applies to the Alliance and to PGH and HDH. Pursuant to section 9(2) of the Act, the Board further declares that PGH and HDH are the predecessor employers and that PGH and HDH operating as a partnership under the name North Simcoe Hospital Alliance is the successor employer for purposes of the Act.
The parties did not make submissions during the hearing before me as to the changeover date that the Board should select under section 9(3) of the Act. In the absence of an order specifying a changeover date, the changeover date pursuant to section 9(3) of the Act is the date of this decision. Should any of the parties seek to have the Board declare a changeover date that is not the date of this decision, that party must deliver its request and written submissions in support of its request to the Board and to the other parties within 10 working days of the date of this decision. If no request is received by that time, the changeover date will remain. If a request is delivered to the Board, the other parties may respond within 5 working days of the date the request was delivered to them. The Board will, if necessary, determine the changeover date based on the parties' written submissions.
Continuation of the Proceeding
- This panel of the Board remains seized with determining all of the remaining issues arising in this application, including, if necessary, the changeover date. This matter is referred to the Registrar to schedule one day of hearing before me.

